Ackman shorted bond insurer MBIA for being undercapitalized and taking on too much risk; investors eventually saw things his way and punished the company amid the credit tsunami. Now
he hopes lawmakers will restructure Fannie and Freddie in a way that will allow them to operate without government support but that will wipe out existing shareholders. (Surprise!
He's short the stocks.)

Of the financial system in general, he concludes, "Institutions keep taking partial writedowns, but they need to come clean with their book of business. Then they can be recapitalized
so they can go back to the business of providing credit."